Buying or selling a business involves more than financial and legal due diligence. Every merger or acquisition brings new risks, responsibilities, and potential coverage gaps. Insurance plays an important role in protecting both sides of the transaction and ensuring a smooth transition.
During the acquisition process, reviewing existing insurance policies is a critical first step. Buyers need to understand what protections are already in place, identify exclusions, and evaluate prior claims that could carry forward. Sellers should verify that all policies remain current and compliant through closing, as expired or incomplete coverage can delay or complicate the deal.
Continuity of coverage is equally important once ownership changes hands. Businesses must account for property, liability, and employee-related coverages under the new structure. Some policies contain change-of-control clauses, meaning coverage may end automatically when a transaction occurs. Reviewing and updating these policies early helps prevent costly gaps.
Certain transactions also benefit from specialized protection, such as:
- Representations and Warranties Insurance – Helps cover losses resulting from breaches of representations made during the sale.
- Directors and Officers (D&O) Liability – Protects leadership during and after the transition.
- Cyber and Data Liability – Addresses exposure tied to system integrations and data transfers.
- Environmental or Professional Liability – Important for industries with regulatory obligations.
Engaging an insurance advisor early in the process ensures that both buyer and seller understand potential exposures and how to address them. The right planning supports business continuity and reduces the likelihood of unexpected financial loss.
Sanger & Altgelt has supported Texas businesses through generations of growth and transition. Contact us to discuss how thoughtful insurance planning can support your next business move.
